WEX (NYSE: WEX) and Planet Payment (NASDAQ:PLPM) are both business services companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, earnings, dividends, profitability, analyst recommendations, valuation and risk.

Analyst Ratings

This is a summary of current recommendations for WEX and Planet Payment, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WEX 0 2 7 0 2.78
Planet Payment 0 0 1 0 3.00

WEX presently has a consensus target price of $122.00, suggesting a potential upside of 18.24%. Given WEX’s higher possible upside, research analysts plainly believe WEX is more favorable than Planet Payment.

Valuation & Earnings

This table compares WEX and Planet Payment’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
WEX $1.17 billion 3.78 $377.31 million $1.66 62.16
Planet Payment $52.79 million 3.45 $12.12 million $0.47 7.87

WEX has higher revenue and earnings than Planet Payment. Planet Payment is trading at a lower price-to-earnings ratio than WEX, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

WEX has a beta of 1.8, indicating that its share price is 80% more volatile than the S&P 500. Comparatively, Planet Payment has a beta of 0.66, indicating that its share price is 34% less volatile than the S&P 500.

Institutional & Insider Ownership

53.6% of Planet Payment shares are owned by institutional investors. 0.9% of WEX shares are owned by company insiders. Comparatively, 20.2% of Planet Payment shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares WEX and Planet Payment’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WEX 6.09% 13.03% 3.23%
Planet Payment 48.14% 25.86% 16.37%

Summary

WEX beats Planet Payment on 8 of the 14 factors compared between the two stocks.

WEX Company Profile

WEX Inc. is a provider of corporate payment solutions. The Company operates through three segments: Fleet Solutions, Travel and Corporate Solutions, and Health and Employee Benefit Solutions. The Fleet Solutions segment provides customers with payment and transaction processing services designed for the needs of commercial and government fleets. The Travel and Corporate Solutions segment focuses on the complex payment environment of business-to-business payments, providing customers with payment processing solutions for their corporate payment and transaction monitoring needs. The Health and Employee Benefit Solutions segment provides healthcare payment products and software as a service consumer directed platforms, as well as payroll related benefits to customers in Brazil. The United States operations include the Company and its subsidiaries WEX Bank, WEX FleetOne, Electronic Funds Source LLC and WEX Health.

Planet Payment Company Profile

Planet Payment, Inc. is a provider of international payment and transaction processing and multi-currency processing services. The Company operates through two segments: multi-currency processing services and payment processing services. Its multi-currency processing services segment includes Pay In Your Currency, Multi-Currency Pricing and Dynamic Currency Conversion at automated teller machines, enable merchants to offer customized pricing in multiple currencies. Its payment processing services consist of end-to-end authorization, capture, clearing and settlement services to its customers along with localized language support and online access to reconciliation, reporting and analytics services. It provides its services to approximately 118,000 active merchant locations in over 20 countries and territories across the Asia Pacific region, the Americas, the Middle East, Africa and Europe, primarily through its acquiring bank and processor customers.

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